In recent years, both banks and credit unions have offered rewards checking accounts with terrific interest rates -- sometimes up to 6.00%. While the interest rates have cooled off, the accounts still offer great benefits like no fee ATM withdrawals and even ATM Rebates.
Bonus rates tend to range from 1.5% - 3.5% APY nowadays, and you earn the bonus rate on a designated amount of the balance -- usually the first $15,000-$25,000. Any amount in your account greater than that, will earn you a reasonable but not as amazing amount -- usually around 0.25% APY. With these accounts, the account offering bank or credit union doesn't charge you non-bank ATM fees, and will rebate you a certain number of fees each month. Most rewards checking accounts offer a maximum of around $20 in ATM fees each month or rebates for 5 transactions, so while you don't get an unlimited number of rebates, you get what most people would consider 'enough.'
High-Yield Interest Rewards Checking Accounts are designed for people who are looking for a new primary checking account. Consequentially, their requirements are not determined by the account's balance, but by your banking behavior and engagement. Standard requirements include a certain number of debit card transactions per month (usually around 10-14), receiving online statements instead of paper statements, and scheduling 1 billpay or automatic payment from the account each month. The qualifying debit card transactions usually take any form -- signature or PIN purchases or online purchases. For many people, if they treat this account as their primary checking account, it's not difficult for them to meet these requirements.
And even if you don't meet these requirements, your account is not charged a fee! Instead, your balance earns a much lower interest rate of usually 0.10% APY and you do not get rebates for your ATM withdrawals for that month. This is the catch -- if you don't meet the debit card purchase requirements for a particular month, you will be charged for those ATM withdrawals. Again, the bank won't charge you, but the fee from the ATM you got the cash will be charged to your account. Then again, if you're confident you'll make the required number of debit transactions each month, you have nothing to worry about!
|Institution||Account Name||Bonus Interest Rate|
|Allegiance Credit Union||Allegiance Rewards Checking||1.25%|
|Cambridge Savings Bank||EarnSmart Checking||0.35%|
|City Bank Texas||Reward Checking||1.03%|
|First Community Credit Union||First Rewards Checking||2.25%|
|First State Bank||FirstChecking plus Interest||1.75%|